Update: Confusion abounds as the government is now said to delay Lula’s appointment after Senator Delcidio Amaral’s plea bargain. According to Veja, Rousseff’s former chief of staff Aloizio Mercadante allegedly offered financial, political and legal aid in exchange for Amaral’s silence.

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Just last week, the BRL was riding high on news that former President Luiz Inácio Lula da Silva was detained in connection with money laundering. He was then charged with corruption by state prosecutors. The market hoped his arrest and possible prosecution would give momentum to the effort to impeach Rousseff. Then, in a dramatic turn of events, Rousseff invited Lula to accept a ministry post yesterday. Initially, reports indicated he would resist the idea of accepting, but that soon changed.

Brazilian politicians have voted to give themselves a 62 per cent pay rise, increasing their salaries to more than 50 times the minimum wage.

President Luiz Inacio Lula da Silva, who has only two weeks left in the job after serving two full terms, joked that he was ‘lamenting’ the vote because he would not benefit Photo: AP
Robin Yapp
A ‘lightning’ vote rushed through the country’s National Congress before it shuts for the year also awarded a 134 per cent pay rise to the president and a 149 per cent increase to ministers.

The changes mean Brazil’s 513 deputies, the equivalent of MPs in the country’s lower house, and 81 senators in the upper house will have parity with the country’s Supreme Court judges, earning R$26,723.13 (£10,063) a month.

But the decision was criticised by some deputies in light of recent Government promises to cut down on public spending in order to help control inflation.

Luiza Erundina, of the PSB party, said that her colleagues had shown “disrespect” to the public, adding: “The deputies are going to end up being attacked in the streets.”

Guido Mantega, Brazil’s finance minister, said last week that he will use a “heavy hand” to cut budgets as he pledged to halve the loans provided to the country’s state development bank BNDES from their 2010 level.

The increases mean the wage bill for Congress will increase by R$136m (£51m) a year.